QualityCash/Assets#52
Positive Earnings Streak measures how efficiently a company converts capital into earnings.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
Cash and Equivalents / Total Assets
Description
Shows what percentage of total assets is held in cash. A healthy cash position provides a buffer against unexpected downturns and gives management flexibility to pursue opportunities. However, too much cash may indicate poor capital allocation.
Interpretation
Above 0.1 (10%) is a reasonable baseline. Very high ratios (above 30%) in non-financial companies may suggest management lacks good reinvestment opportunities. Compare to peers and consider the company's capital allocation track record.
Related metrics: Return on Equity (ROE), Return on Assets (ROA), Return on Invested Capital (ROIC). (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Positive Earnings Streak- Primary source filings used to calculate Positive Earnings Streak.
FAQ
How is Positive Earnings Streak calculated?+
Positive Earnings Streak uses the formula: Cash and Equivalents / Total Assets. compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR 10-K + 10-Q filings (segment-level disclosures).
What is a good Positive Earnings Streak value by sector?+
There is no single 'good' value for Positive Earnings Streak — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for Positive Earnings Streak on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Positive Earnings Streak?+
Charlie Munger, Joel Greenblatt, Terry Smith cite Positive Earnings Streak as a key input to to find compounders with durable economic moats. The academic anchor is Greenblatt (2005) Magic Formula and Mauboussin (2014). ValueMarkers weights this within the Quality pillar of the VMCI score (30% of total).
What are the limitations of Positive Earnings Streak?+
Positive Earnings Streak can mislead in asset-light businesses where conventional capital ratios mislead. Pair Positive Earnings Streak with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Positive Earnings Streak data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Positive Earnings Streak data, sector percentiles, and the VMCI composite score that integrates Positive Earnings Streak with 119 other indicators across 100,000+ stocks. The free /screener exposes Positive Earnings Streak as a filterable column.
Related Quality Indicators
Return on Equity (ROE)Op Margin
Return on Equity measures how efficiently a company converts capital into earnings.
Return on Assets (ROA)Net Margin
Return on Assets is the metric used to how efficiently a company converts capital into earnings.
Return on Invested Capital (ROIC)EBITDA Margin
Return on Invested Capital measures how efficiently a company converts capital into earnings.
Return on Capital Employed (ROCE)FCF Margin
Return on Capital Employed is the metric used to how efficiently a company converts capital into earnings.
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